NORDEA

AND 

"THE PANAMA PAPERS"

By

Søren Nielsen

2021

WHAT IS PANAMA PAPERS?

The Panama papers are more than 11.5 million leaked documents from the law firm Mossack Fonseca, which is headquartered in Panama and has helped several people set up drawer companies and keep money in tax havens.

Many politicians and celebrities were exposed to secret companies that they owned or had owned, and in Denmark one of the most sensational stories was that the Nordic region's largest bank, Nordea, had an extensive collaboration with Mossack Fonseca.

Several hundred Danes were also in the papers.

The names of about 140 world politicians and others, including Chinese President Xi’s brother-in-law, Li Peng’s children, the emir of Qatar, and close friends of Vladimir Putin, pop up in some of the 11.5 million leaked records. 

They all used the services of Mossack Fonseca, a Panama-based law firm, to hide their finances from the taxman.

The leaked Panama Papers name scores of people as beneficiaries of banks and shadow companies to hide their finances.

They names include, among others, those of the brother-in-law of Chinese President Xi Jinping, the children of Li Peng  aka "the butcher of Tiananmen", the president of Ukraine, the Emir of Qatar, the sons of Hosni Mubarak, the King of Morocco Mohammed VI, close friends of Vladimir Putin, as well as political leaders in Iraq and United Arab Emirates.

Also on the list are sport figures, like Lionel Messi, actors like Jackie Chang, for a total of some 140 political and public figures.

The scandal broke out yesterday when the International Consortium of Investigative Journalists announced that it had obtained 11.5 million records from Panama-based law firm Mossack Fonseca, a top creator of shell companies with branches in Hong Kong, Miami, Zurich and more than 30 other places around the globe.

The documents span from 1977 to 2015. 

Some 376 journalists from 70 countries and more than 100 news organisations got involved in processing the information.

Among the revelations was that Iceland's Prime Minister, Sigmundur Gunnlaugsson, had secretly owned a company in the British Virgin Islands.

Sigmundur Gunnlaugsson resigned as prime minister a few days later because of the case.

Also, football star Lionel Messi and people closely linked to Russian President Vladimir Putin were revealed to have companies in tax havens.

Here, after the revelations, it is clear that the information in the Panama Papers has been very useful to the tax authorities in large parts of the world.

A new statement from ICIJ (International Consortium of Investigative Journalists) shows that tax claims have been raised or tax dollars recovered for at least 8 billion Danish kroner on the basis of the Panama papers.

And the number is probably higher, as some countries do not state what they have recovered, and other countries like Denmark have not finished processing the cases.

The Ministry of Taxation informs us that the Danish Tax Agency has so far decided 155 cases and raised claims for 315 million Danish kroner on the basis of the Panama papers.

And the board is not done with that work yet.

And the decision that several parties in the Folketing made, was to buy these papers for a little over 6 million kroner based on a purely merchant-like mindset, then it has been a good deal with the 6 million kroner for well over 300 million kroner, says Karsten Lauritzen (V).

Nordea in massive media storm.

The papers showed that many of Mossack Fonseca's customers had set up companies in tax havens, such as in the British Virgin Islands or in Panama, with anonymous straw men who were directors on paper, so that tax authorities could not see who actually owned the companies and the owners, and perhaps had income they should have paid tax on.

Nordea also plunged into a massive Scandinavian media storm, as DR and other media were able to reveal that the bank helped when their customers set up and maintained companies in tax havens.

E-mails showed that the bank for a number of years helped customers buy and maintain straw man companies from Mossack Fonseca.

Document was also able to reveal that a Nordea employee at one point asked the law firm to backdate a document with almost two years.

Nordea has since sold the bank's branch in Luxembourg, which was the branch that took care of the business with Mossack Fonseca.

Nordea is mentioned in more than 10,000 of the documents, and emails show that the bank has for a number of years - and in particular until 2009 - helped its customers buy and maintain straw man companies and proxies with Mossack Fonseca.

Among other things, the documents show that Nordea is aware that customers get constructions with local straw men at the head of the tax haven company.

And that customers with a secret power of attorney, which the Danish tax authorities cannot see, still retain power in the company.

Nordea knows that they make these straw man constructions, that they know that they are shadow companies that they make.

For there is no doubt that they are quite knowledgeable about it.

They are contributors to tax evasion, and I actually did not think so about Nordea.

It may also reveal that a Nordea employee at one point asked Mossack Fonseca to backdate a document by almost two years.

Nordea's head of Private Banking, the Dane Thorben Sander, admits that it was a mistake to ask for the backdating:

"It is quite clear that it is completely unacceptable."

"It must not take place."

But he denies that Nordea helps its customers avoid paying taxes:

"We do not help our customers avoid tax. We cannot accept our bank being used as a platform for tax evasion. We help our customers pay the tax they have to pay, he says."

Director was dead for eight years.

The documents show that many of the directors who work in several companies in Panama also return to many of Nordea's customers' companies.

For example, one of the straw men, Leticia Montoya, according to Panama's open company register, has been a director of more than 10,299 companies at one time.

In my world, it shows with all clarity that this has no reality on it. At all.

There is no one who can be a director of 10,299 companies at a time.

It's an artificial set up.

An email from Nordea to Mossack Fonseca from 2013 also states that one of the directors of a Nordea customer's company has been dead for 8 years.

The leaked documents also reveal that she apparently signed several documents almost 3 years after her death.

But Nordea's head of Private Banking does not want to answer clearly what Nordea thinks about these straw man structures.

Is it okay with such structures?

"We have a clear position that the solutions and advice we provide at Nordea are within the framework of the law and within our ethical guidelines, it reads."

According to the Nordea boss, today it is no longer possible to hide money in the Panama companies.

"We have made new processes and we have also made agreements with all customers that we can report their tax position."

For the same reason, many customers have left us, says Thorben Sander.

But the latest documents from 2015 show that Nordea's customers still own over a hundred active companies at Mossack Fonseca in Panama.

However, there is no hidden money in the companies, the top manager maintains.

Following the revelations about tax havens, Nordea and 8 other companies, including three other banks, will now be fined 2 million euros, (14.9 million Danish kroner) due to "medium or serious" violations in connection with the Panama Papers revelation.

In the United Kingdom alone, the tax authorities have raised claims of 1.6 billion Danish kroner on the basis of the Panama Papers.

In France, the figure is approx. 900 million Danish kroner, and in Australia the figure is more than 600 million Danish kroner.

In other countries, such as Poland and South Korea, the authorities will not say whether they have scraped in extra tax revenue on the basis of the Panama Papers.

This is evident from a large number of responses to the journalists in the countries in question, and thus claims for 8 billion Danish kroner in total.